MAIN HEADLINES

• President Vladimir Putin has signed a decree saying Russian gas - which accounts for around 40 percent of European supplies - must be paid for in rubles from tomorrow, or it will be cut off. Russia wouldn't export gas as "charity", he said. If payments are made in rubles, the Kremlin could shore up its faltering currency amid Western restrictions on access to its foreign exchange reserves.

• However, Germany and France have again rejected the demands, saying it was an unacceptable breach of contracts and amounted to "blackmail". That leaves Europe facing the prospect of losing more than a third of its gas supplies, with Germany already activating an emergency plan that could lead to gas rationing.

• NATO's secretary general Jens Stoltenberg said Russian forces in Ukraine are not withdrawing but regrouping, in response to Moscow's announcement to scale down its military operations around Kyiv. He added the alliance was not currently convinced  Russia was negotiating in good faith at peace talks in Istanbul. 

• Moscow said on Thursday it has barred the EU's top leadership from entering the country in response to what it described as anti-Russian policies.

• Norwegian Prime Minister Jonas Gahr Støre said Putin had assured him Moscow would help secure humanitarian access to civilians in the besieged city of Mariupol.

• Putin also told his Italian counterpart by phone that conditions were not yet in place for a ceasefire in Ukraine, Prime Minister Mario Draghi said on Thursday.

• The Italian leader added that Putin had told him current Russian gas contracts with Europe remained in force and could continue to be paid in euros and dollars, adding that he had understood "the conversion of the payment ... is an internal matter of the Russian Federation."

• Russia has declared a local ceasefire in Mariupol, with the Ukrainian government set to send 45 buses to evacuate civilians via a humanitarian corridor to the town of Zaporizhzhia. Previous attempts to evacuate the besieged city have failed. 

• President Vladimir Putin's advisors have "misled" the leader over Russia's "massively misjudged" attack on Ukraine, according to Western intelligence. US officials claim the president's mistrust in his military leadership is causing "persistent tensions."

• Russia and Ukraine will resume online peace talks on April 1. A senior Ukraine official said leaders of the two countries could meet "soon," but the Kremlin downplayed hopes of an early breakthrough.

• Ukrainian President Volodymyr Zelenskyy says he does not trust the Kremlin's announcement that it will scale back military activity around the capital Kyiv: "We don't believe anyone, not a single beautiful phrase."

• He also warned that Russian troops are regrouping for a large offensive in the eastern Donbas region, saying that Ukrainian forces were "prepared" for the strike. 

• Pro-Russia separatists have claimed they are in control of almost all of the Luhansk region and more than half of the Donetsk region.

• The mayor of Irpin, the western gateway to Kyiv, says at least 200 people have been killed and more than half of the town destroyed amid the fierce fighting for control of the city. The town, retaken by Ukraine from Russian forces this week, is reportedly still being shelled.

• The UK has imposed further sanctions on prominent Russian figures and military leaders, including Sergey Brilev, the owner of the state-controlled news channel Russia Today (RT).

• Eight Russian oligarchs on the UK's sanctions list were granted "golden visas" to live in Britain after pledging to invest at least £2m under the investor visa scheme, the UK government has announced.

• The Russian and Ukrainian economies are set to contract by 10 and 20 percent respectively in 2022 as the conflict causes "the greatest supply shock" for 50 years, Europe's development bank said.

• The UN's human rights chief has said Russia's attacks on populated areas in Ukraine could amount to "war crimes."

• Germany and Austria have activated emergency energy plans over concerns Russia could cut off gas supplies if Western states refuse to make payments in rubles. However, Putin reportedly told Chancellor Olaf Scholz Germany could continue paying in euros, Berlin has said. 

• EU antitrust investigators have reportedly raided the German offices of Russian energy giant Gazprom on suspicion that it had illegally pushed up fuel prices in Europe.

• Russian Foreign Minister Sergei Lavrov says Moscow and Beijing are pursuing a "multipolar, just, democratic" world order on his first visit to China since the invasion of Ukraine. 

• More than four million Ukrainians have fled the country since the start of the conflict, the UN has said.

IN DETAIL

Putin threatens to shut off Europe's gas

Russian President Vladimir Putin has signed a decree saying foreign buyers must pay for Russian gas in rubles from Friday or their supplies will be cut, a demand European capitals have rejected, with Berlin saying the announcement amounted to "blackmail".

The decision could leave Europe facing the prospect of losing more than a third of its gas supplies, with energy exports one Moscow's most powerful weapons in its arsenal in response to Western sanctions, which he has called "akin to an act of war."

Putin said buyers of Russian gas now "must open ruble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow," or April 1.

"If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either - that is, existing contracts will be stopped," he said.

READ MORE:

Human traffickers target Ukraine refugees

Life behind Russian lines

How e-sports is making Wolves a global brand

Western companies and governments have rejected any move to change their gas supply contracts to change the payment currency. Most European buyers use euros, while executives say it would take months or longer to renegotiate terms.

France's economy minister Bruno Le Maire said France and Germany were preparing for a possible scenario that Russian gas flows could be halted.

However, it remains unclear whether there will still be a way for foreign firms to continue payment without using rubles. Prime Minister Mario Draghi said on Thursday he did not expect supplies to be cut off, after he spoke to Putin on Wednesday. 

"No they are not in danger," Draghi told a news conference in response to a question about Russian gas supplies, which make up around a third of Italian imports.

"I don't think the Western countries have done anything except say that it would be unacceptable to pay in rubles, if not impossible," he said. 

"I think there has been a process of reflection within Russia that has led to a better definition of what it means to pay in rubles, as President Putin defined it yesterday."

"What I understood, but I may be wrong, is that the conversion of the payment ... is an internal matter of the Russian Federation," he added.

However, the Kremlin spokesman Dmitry Peskov said on Thursday that "unfriendly" countries would have to buy rubles for the currency stipulated in their contracts for subsequent Russian gas purchases. The details of the scheme are still be scrutinized. 

Turn from Kyiv to Donbas

Ukrainian forces are preparing for new Russian attacks in the Donbas region as Moscow claimed to pull back its forces from around the Kyiv area, President Volodymyr Zelenskyy said on Thursday.

Moscow says it is now focused on "liberating" the southeastern area, where pro-Russian separatist governments have held control of two self-proclaimed republics since 2014. 

In an early morning video address on Thursday, Zelenskyy said that Russian forces moving away from the area around the capital was not a withdrawal, but instead "the consequence of our defenders' work."

Russia announced on Monday that it was scaling back its offensive near Kyiv and the city of Chernihiv in Ukraine's north, in what it said was a trust-building gesture. 

The past week has seen a resurgent Ukrainian counter-offensive, with Ukrainian forces recapturing suburbs around the capital, as well as strategic sites in the northeast and southwest. 

However, Zelenskyy said Ukraine was now seeing "a build-up of Russian forces for new strikes on the Donbas and we are preparing for that."

That includes the besieged city of Mariupol, which has been devastated by Russia's bombardment and siege since the escalation of the conflict. 

Pro-Russia separatists said on Thursday they were in control of almost all of the Luhansk region and more than half of the Donetsk region. However the claims are yet to be verified. 

A convoy of Ukrainian buses set out for the port city on Thursday to try to reach trapped civilians, Deputy Prime Minister Iryna Vereshchuk said. 

Several previous attempts to evacuate citizens and set up humanitarian corridors from the city have failed, but teams from the International Committee of the Red Cross are headed to the city to help with the transfer.

Putin misled?

Jeremy Fleming, the head of the UK's spy agency, GCHQ,  has said President Putin's advisors are "afraid to tell him the truth" about how badly things are going in Ukraine but the extent of his "misjudgement" should be crystal clear.

His comments in a speech in Australia come after the U.S. released intelligence claiming to show a rift between Putin and his advisors, who allegedly failed to warn him of Russia's true military capacity or the economic impact of Western sanctions.

"We have information that Putin felt misled by the Russian military, which has resulted in persistent tension between Putin and his military leadership," Kate Bedingfield, White House communications director, told reporters on Wednesday.

"We believe that Putin is being misinformed by his advisers about how badly the Russian military is performing and how the Russian economy is being crippled by sanctions, because his senior advisors are too afraid to tell him the truth."

A senior European diplomat said Washington's assessment corresponded with European intelligence. "Putin thought things were going better than they were. That's the problem with surrounding yourself with 'yes men,'" the diplomat told Reuters. 

Military analysts have framed Russia's turn to Donbas as an attempt to rest its war goals in a bid to claim a face-saving victory. Denis Pushilin, a Russian-backed separatist leader in Donbas, said on Wednesday that its offensive operations were intensifying.